Tuesday, 7 May 2013

BOOK REVIEW: A Good African Story

TRADE not aid: it’s a familiar refrain, but one that entrepreneur Andrew Rugasira argues is the only way Africa will develop sustainably. And it is one he can attest to first hand. Today, Rugasira exports his Ugandan coffee brand to the UK, the US and SA. His Good African coffee is the first African-owned coffee brand, benefiting large numbers of African farmers.

The book is a personal account of his struggle in getting farmers to work together, while battling to convince overseas retailers to take on his coffee. He argues for easier access for African-made products to developed markets, while detailing the challenges the continent faces — weak political institutions and a near-absent business sector.

While weak institutions fuel corruption, the absence of rules creates uncertainty for entrepreneurs, who have little incentive to invest in what could later be sabotaged by the state or others. After the overthrow of Idi Amin in 1979, Rugasira got to witness the many abuses of the state when the army would routinely harass his father, who owned a chalk-manufacturing plant. His father was imprisoned several times by the army.
Rugasira also comments on the Ugandan economy’s rapid contraction in the 1970s after Amin’s expulsion in 1972 of all Indians, who owned most businesses. But Rugasira argues that because of government mismanagement, the economy was already in free fall before the expulsion order. As recently as 2010, of the 25 top taxpaying companies in Uganda, none were African-owned businesses (with the exception of a Pepsi franchise). The bulk are firms owned by Asian Ugandans, multinationals and parastatals.

Rugasira’s solution to developing Africa is one of fairer trade, such as lower tariffs. However, fairer trade must not equate to Fairtrade, the international standards body that works to secure better prices for farmers and workers. For Rugasira, Fairtrade is just another handout — "not far from the old charity model".

He contends that what is needed is help for farmers to link to African producers, which will then grow the value chain, create more jobs, encourage entrepreneurs and grow tax revenues and wealth.
However, his story underlines a continuing problem in doing business in Africa — the close ties entrepreneurs must forge with the state to get anything done. For example, Rugasira makes personal visits to the reserve bank governor and officials in the trade and industry department to get a loan to fund his business.

Despite this, his is an inspiring story of how the continent is fast turning itself around. Africa needs more entrepreneurs to tell how they did it.